The competitive mechanism fails in economies with nonconvex technologies. Competitive equilibria do not exist in general, and Pareto optima are no longer equilibria. The search for alternative mechanisms in economies with increasing returns was developed and resulted in the principle of marginal cost pricing. Modern economic theory has returned to the foundations of marginal cost pricing theory in a general equilibrium framework. The existence of equilibria with marginal cost pricing in economies with increasing returns and a more general type of nonconvexities is analyzed in this paper. The case of differentiable economies where all production sets are limited by smooth surfaces is developed. The principles of the proof are also extended to the nondifferentiable case.
This paper formulates and estimates a model of the determinants of female household headship. Headship responds to variations in the levels of well-being a woman can expect if she marries or if she heads her own household. We measure the opportunity cost of female headship and the effects of welfare benefits and women's work in the market on female headship and poverty. We find that if welfare benefits were reduced, there would be small reductions in the proportion of women heading households for whites and nonwhites, but a substantial increase in poverty for nonwhites. We also find that wives' work in the market reduces poverty and female headship for nonwhites, and reduces poverty, but increases headship for whites.
Journal Article Gottfried Haberler's Contributions to International Trade Theory and Policy Get access Robert E. Baldwin Robert E. Baldwin University of Wisconsin-Madison Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 97, Issue 1, February 1982, Pages 141–148, https://doi.org/10.2307/1882631 Published: 01 February 1982
Journal Article Incentive Compatibility in Bargaining Under Uncertainty Get access Kalyan Chatterjee Kalyan Chatterjee Pennsylvania State University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 97, Issue 4, November 1982, Pages 717–726, https://doi.org/10.2307/1885109 Published: 01 November 1982
In choosing a two-part tariff, a monopoly subject to rate-of-return regulation will rely more on demand elasticities and less on marginal costs than would a welfare-maximizing firm. The rate-of-return regulated firm also will reduce its access fee or its marginal usage fee more, depending on whether adding consumers or increasing output requires marginally the most capital. In the typical case these effects will favor declining-block rate structures, which helps to explain their widespread use by rate-of-return regulated firms.
In this paper I use some recent work in the microeconomics of imperfect information to construct a macro model. The microeconomic theory suggests that atomistically competitive firms face kinked demand curves. In this model there is a range of aggregate equilibria consistent with correct information. I then show that individual firms can face a free-rider problem in trying to move from one equilibrium to another by changing the price level. Monetary policy is not subject to this problem, even if the policy is fully anticipated.
Recent empirical work on captial gains implies that realizations are highly sensitive to marginal tax rates. Because they are based on cross-section data, however, these estimates cannot distinguish between permanent responses to tax rate changes and the timing of realizations to take advantage of the normal fluctuations in any individual's tax rates over time. The purpose of this paper is to distinguish transitory from permanent tax effects by analyzing panel data for taxpayers. Controlling for permanent and transitory income and other variables, the estimates suggest both transitory and permanent effects, although the permanent tax rate effect is not significant in all cases.
This paper examines the effects of tariffs and quotas on the pricing pattern of producers in the case of duopoly by a domestic monopolist and a foreign monopolist. It is pointed out that tariffs and quotas may induce completely different pricing patterns in the two producers. Under a quota, it is always profitable for the home producer to be a price leader and for the foreign producer to be a follower, whereas under a tariff either producer may become a leader. It is also proved that, whatever leader-follower relation is chosen under a tariff, a quota always bring about a higher domestic price than the tariff as long as both permit the same amount of imports.
It is shown that any continuous social aggregation rule for smooth preferences cannot simultaneously satisfy the properties of anonymity and respect of unanimity. This is true even when all individual preferences are linear. The relationship between the conditions on the social rule studied here and those of Arrow's paradox is discussed. The first result requires that the normalized gradient of the social choice rule be definable in the interior of the choice space, thus indicating a direction of increase of social preference. A second impossibility result extends the first to cases where the gradient of the social preference may vanish in the interior of the choice space.